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Sterling Traders Focus On Carney’s Testimony

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Dear Traders,

The U.S. dollar slumped against the euro and British pound after the U.S. services sector index unexpectedly dropped to a six-year low, bolstering speculation that the Federal Reserve will stand pat on lower interest rates. The ISM non-manufacturing index expanded at its weakest pace in six years and this decline was reason enough for dollar bulls to give up on their dollar long positions, sending the greenback’s counterparts significantly higher in return.

The euro jumped above 1.12 and currently attempts to sustainably overcome the next resistance level at 1.1250. Above 1.1270 it could head for a test of 1.13 and 1.1330. In the case of further dollar weakness we see a next crucial resistance zone around the 1.1360-level. Euro bears should however wait for prices below 1.1220 in order to sell the euro.

The pound sterling extended its gains and rose above 1.34. Whether there is still some more upside room remains to be seen and could hinge on today’s U.K. data and a testimony of Bank of England Governor Carney. The BoE governor will answer to a panel of lawmakers and questions will also center on the August Inflation report, in which officials lowered their growth forecasts by the most ever. The testimony is scheduled for 13:15 UTC today and could have a major impact on the pound as it will be scrutinized for clues about the U.K. outlook and the possibility of a further rate cut by the end of the year.

U.K. Industrial and Manufacturing production figures are scheduled for release at 8:30 UTC.

Last but not least, the Fed releases its Beige Book at 18:00 UTC which could have a minor impact on the dollar.

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Fed Chairman Janet Yellen Testimony

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Dear Traders,

what’s going on this week?

We will listen to the speeches of Janet Yellen  (Tuesday & Thursday) and Mario Draghi (Wednesday).

Yellen will speak the first time before the U.S. Congress since being chairman of the Federal Reserve. Market strategists expect that she will reinforce the Feds’ steady tapering course.

From the technical point of view we should expect following:

EUR/USD

Chart_EUR_USD_Daily_snapshot 10.02.

 

The Euro is trading in a down-trend channel. We should presume that a drop is very likely.

We go long above the level @1.3660 until 1.3710

We go short below the level @1.3590 until 1.3550/00

GBP/USD

Chart_GBP_USD_Daily_snapshot 10.02.

The Cable has a strong support at this level drawn in the picture.

We will look out for long contracts until 1.6500/60. For short contracts we will have our target at the level of 1.6300.

Daily, we update all our signal subscribers with exact entries and Take Profits Levels as well as appropriate money-management.

We wish you many good trades and a beautiful week.